Nokia Corp. reported a 90% drop in first-quarter profit, but the world’s top cellphone maker said it saw signs of stabilizing demand in the weak handset market.
‘The market is no longer falling in an uncontrolled manner,’ said Nokia Chief Executive Olli-Pekka Kallasvuo during a conference call Thursday. ‘I’m encouraged by the signs of stabilization seen at the end of the first quarter.’
Mr. Kallasvuo said the industry’s outlook was more predictable as the inventory of unsold cellphones in stores and warehouses had decreased substantially in the first quarter. But he said it is too early to say whether the drop in global consumer demand has reached bottom.
Nokia has fared better than many rivals during the recession,louis vuitton, but it too has been hit by a sharp decline in consumer spending. For the three months ended March 31, Nokia’s profit plummeted to 122 million euros ($161.3 million) from 1.22 billion euros a year ago. Sales fell 27% to 9.27 billion euros from 12.66 billion euros a year earlier.
The Espoo, Finland,replica watches, company said it sold 93.2 million handsets during the first quarter,louis vuitton, down 19% from a year earlier and down 18% from the fourth quarter.
The company’s first-quarter market share remained flat from the fourth quarter at 37%,replica watches, in line with Nokia’s outlook from January. The average selling price, or ASP, of its phones slipped to 65 euros from 71 euros the prior quarter.
Nokia said it still expects 2009 industry handset volumes to fall some 10% from 2008 levels,louis vuitton, with most of the decline to happen in the first half of the year. It expects volumes in the second quarter to be flat or slightly up on the first quarter.
Gartner analyst Carolina Milanesi said the fact that Nokia maintained its outlook is a positive signal for many market watchers. ‘The bottom line is that although sales were a bit better than anticipated,replica watches, the strain on the market is clearly seen in the financial results with an ASP that dropped $6 quarter-on-quarter,’ Ms. Milanesi said.
Nokia shares have fallen nearly 50% in the past year, bottoming out at a near 10-year low of 6.91 euros before rebounding sharply in the past month. After the earnings release, Nokia’s American depositary receipts rose 11% to close at $14.88 on the New York Stock Exchange.
Nokia said it gained smart-phone market share in the first quarter due to robust sales of its 5800 touch-screen music phone, which rivals Apple Inc.’s iPhone and the E71 business phone. The 5800, which went on sale in November,replica watches, sold 2.8 million units in the first quarter.
Chief Financial Officer Rick Simonson said the company’s smart-phone market share increased to 38% in the first quarter from 32% in the fourth quarter of last year.
Adam Ewing
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